According to Leonid Fedun, vice-president of Russian corporation Lukoil, Russia should drop oil output by 20%-30% to seven to eight million barrels per day (bpd) to receive a better price and avoid selling it at a disadvantage.
Following Russia’s invasion of Ukraine in February, Western sanctions cut Russia’s financial sector off from the global economy, putting pressure on oil production and sales as importers rejected Russian barrels or demanded a discount.
As previously reported, EU leaders will gather today to debate a plan to prohibit Russian oil from being transported to EU nations by sea by the end of this year, with an exception for oil carried through a pipeline that serves Hungary, Slovakia, and the Czech Republic.
“Why should Russia retain a 10 million barrel per day oil production capacity when we can (more) efficiently consume and export seven to eight million barrels per day without incurring state budget or domestic consumption losses?” In an article published by Russia’s RBC daily, Mr Fedun, who co-founded Lukoil with Vagit Alekperov in 1991, said.
He wrote, “Which is better: selling 10 barrels of petroleum for $50 or seven barrels for $80?”
Mr Fedun also advocated for additional investment in Russia’s tanker fleet, claiming that sanctions had raised the cost of chartering tankers.